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Question: suppose you hold a 65 percent coupon bond with a...

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Suppose you hold a 6.5 percent coupon bond with a par value of $100 that matures in 14 years and pays semi-annual coupons. 1) If currently, the bond is priced to offer a yield to maturity of 7.2 percent, what is its current selling price? 2) You believe that in one year, the yield to maturity will be 6.8 percent. a. Wil the bond price increase or decrease from its current market value? Explain why. (No Calculations required) b. Will the price be higher or lower than $100? Explain why. (No calculations required) If you hold the bond for the entire year and the change in yield to maturity occurs, what would 3) be your total return in dollars and percentage?

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